The lung develops through a series of endoderm-mesoderm interactions that promote proper patterning of the highly complex and arborized structure required for postnatal respiration. Little is understood about how Wnt signaling promotes these early stages of lung development, whether Wnt signaling regulates specific aspects of early branching morphogenesis of the airway and vascular structures in the lung, and whether disruption of Wnt signaling can lead to human lung disease. Our preliminary data show that Wnt signaling regulates a specific type of airway branching called domain branching through the receptor Fzd2 and that disruption of domain branching leads to a phenotype resembling congenital cystic adenomatoid malformation (CCAM) in pediatric patients. Moreover, the molecular alterations that occur upon loss of Fzd2, including increased Fgf9 expression and decreased Fgf7 expression, also mimic the CCAM phenotype. Using a novel inducible cre line in the Wnt2 locus generated in our lab (Wnt2creERT2), we also show that Wnt2+ progenitors contribute to different mesenchymal lineages within the developing lung in a temporal restricted pattern and generate alveolar mesenchymal cells within the adult lung that can contribute to the generation of myofibroblasts in a model of lung fibrosis. Taken together these data suggest a critical role for Wnt signaling in two poorly understood processes in lung development and homeostasis: 1) domain branching in a temporal restricted fashion that when disrupted leads to congenital lung disease and 2) differentiation of specific mesenchymal lineages within the developing and postnatal lung through Wnt2 signaling. Using the new tools and techniques we have generated in the last round of funding we will 1) define the molecular pathways underlying the regulation of domain branching by Wnt/Fzd2 function and determine whether defects in Wnt signaling occur in CCAM lesions in humans, and 2) determine the contribution of Wnt2+ (Wnt expressing) and axin2+ (Wnt responsive) cells to lung mesenchymal development and the postnatal response to fibrotic injury models.